Scottish Sheriff Court Decisions

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Cite as: [2004] ScotSC 51

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SHERIFFDOM OF LOTHIAN AND BORDERS

SA3758/03

JUDGMENT OF

SHERIFF PRINCIPAL IAIN MACPHAIL QC

in the appeal

in the cause

ANDREW BARLOW
Pursuer and Respondent

against
CITY OF EDINBURGH COUNCIL
Defenders and Appellants

_________________________

Act: No appearance

Alt: N R Mackenzie, Advocate; City of Edinburgh Council

EDINBURGH, 6 August 2004.

The Sheriff Principal, having resumed consideration of the cause, answers the question in the stated case in the affirmative; allows the appeal, recalls the interlocutor of 9 March 2004 complained of and dismisses the action; finds the pursuer and respondent liable to the defenders and appellants in the expenses of the appeal; appoints the Sheriff Clerk to fix the amount of the said expenses in terms of rule 21.6 of the Small Claim Rules 2002 and thereafter remits the cause to the Sheriff to grant decree therefor and in terms hereof.

NOTE

[1] This is a defenders' appeal against a decree for payment pronounced in a small claim. The pursuer, who is a party litigant, raised an action against the defenders for 'refund of money paid to Council, £175 plus court costs plus expenditure incurred attempting to gain funds from Council'. On 9 March 2004 the Sheriff granted decree for £175 with expenses of £39. The defenders appealed. The pursuer did not attend the hearing of the appeal.

[2] The material facts are not in dispute. On 24 April 2003 the pursuer applied to the defenders for a house in multiple occupation licence (an HMO licence). He submitted with his application a fee of £480. On 26 April 2003 he withdrew the application. Thereafter the defenders returned to him the sum of £305 but retained the balance of £175 to cover their administrative costs. The pursuer subsequently raised the present action. In their written note of defence the defenders founded on paragraph 15 of Schedule 1 to the Civic Government (Scotland) Act ('the Act') to which I shall refer below. At the first calling of the case on 10 February 2004 the Sheriff who then presided continued the cause until 9 March 2004 and apparently referred the pursuer's request for the refund of £175 to the defenders' Regulatory Committee. In any event that Committee considered the request on 13 February 2004 and resolved to refuse it. When the case was called on 9 March 2004 the parties were agreed as to the material facts. The Sheriff heard their submissions and found the pursuer entitled to the sum of £175.

[3] In the stated case the Sheriff's finding in law is in these terms:

The defenders, having no right to retain the said sum of £175, the pursuer is entitled to reimbursement of said sum.

The Sheriff explains his reasons thus:

The defenders are given specific power to charge reasonable fees in respect of applications etc. The defenders must make sure that the fees charged by them meet their expenses in carrying out their function, in this case dealing with the pursuer's HMO licence application. They are not entitled to make a profit.

I took the view that without some specification as to what the £175 covered it was not reasonable for the defenders to retain that sum under some blanket policy and as they had not seen fit to give some specification as to how the amount was made up I should grant decree in favour of the pursuer, which is what I did for the £175 retained, together with court dues of £39.

[4] For the reasons given by the defenders' counsel, which I now summarise, I am satisfied that the appeal should be allowed on the ground that the action is incompetent. The legal basis of the pursuer's case is not stated in the summons and is not explicitly identified by the Sheriff. In expressing the view that it was unreasonable for the defenders to retain the sum of £175 the Sheriff appears to imply that the pursuer is entitled to repetition. But even on that basis the action is incompetent. The defenders' decision to retain the sum of £175 was taken in the exercise of the statutory powers confided to them by the Act. If the pursuer considers that the defenders have abused these powers, his only remedy is to apply to the supervisory jurisdiction of the Court of Session.

[5] Part I of the Act has effect with respect to the licensing of the activities for which licences are required under Part II (section 1). For the administration of licensing in relation to these activities there is for the area of each local authority a licensing authority which is the local authority itself (section 2(1), (2)). Provision as to licensing and regulation in relation to these activities is made in Schedule 1 (section 4). Any activity other than one of those specified in Part II may be designated as an activity for which a licence is required (section 44(1)(b)). In the exercise of that power the Scottish Ministers made the Civic Government (Scotland) Act 1982 (Licensing of Houses in Multiple Occupation) Order 2000. Article 4 of the Order provides that Part I of the Act is to apply for the purposes of the licensing of the activity of giving permission for a house to be occupied. Thus Schedule 1 to the Act also applies, by virtue of section 4. Paragraph 1(1)(c) of Schedule 1 provides that an application to a licensing authority for the grant or renewal of a licence must be 'accompanied by such fee as the authority may charge under paragraph 15 below'.

[6] Paragraph 15 provides, so far as material:

15. - (1) A licensing authority shall, subject to sub-paragraph (2) below -

(a) in respect of applications made to them under this Schedule; [...]

charge such reasonable fees as they may, in accordance with sub-paragraph (2) below, determine; and the authority may under this sub-paragraph determine different fees for different classes of business, and items of business may be classed for that purpose by reference to any factor or factors whatsoever.

(2) Subject to sub-paragraph (3) below [which is not material for present purposes], in determining the amount of the different fees under sub-paragraph (1) above, the licensing authority shall seek to ensure that from time to time the total amount of fees receivable by the authority is sufficient to meet the expenses of the authority in exercising their functions under Parts I and II of this Act and this Schedule.

Thus by sub-paragraph (1) the Act entrusts to the defenders a very wide discretion to determine the amount of the fees to be charged. By sub-paragraph (2) it makes it clear that in so doing they must seek to ensure that the total amount of the fees receivable is sufficient to meet the specified expenses: they are not required to adjust the fees payable for particular applications. They have no statutory obligation to provide any refund to an applicant who withdraws an application.

[7] The defenders nevertheless have a policy of granting a refund of a proportion of an application fee. The pursuer asked for a full refund of the application fee. That was the request considered by the defenders' Regulation Committee on 13 February 2004 (see paragraph [2] above). The defenders wrote to the pursuer on 20 February 2004 advising him that his request had been refused. The letter said in part:

The Regulatory Committee noted that there is no legislative requirement for a licensing authority to return any part of a licensing application fee and that it was not appropriate to vary the agreed procedure whereby a set proportion of an application fee will be refunded on request.

The defenders had no duty under the Act to give reasons for this decision. It is not among the classes of decision for which reasons are required by paragraph 17(1) of the Schedule and against which an appeal to the Sheriff may be taken by virtue of paragraph 18(1).

[8] In any event the original decision to retain the sum of £175 and the decision of the Committee that it should not be returned were both taken in the exercise of the power of decision delegated to the defenders by the Act. If the pursuer considers that they have abused that power or have failed to perform the duty entrusted to them, any remedy open to him is by way of judicial review in the Court of Session. The sheriff court does not have any such supervisory jurisdiction. (Brown v Hamilton District Council 1983 SC (HL) 1; West v Secretary of State for Scotland 1992 SC 385 at 412-413.) The present action is accordingly incompetent and on that ground the appeal must succeed.

[9] I have therefore recalled the Sheriff's interlocutor. The defenders have sought an award of expenses. They cannot recover their expenses at first instance since the value of the cause does not exceed £200 (Small Claims (Scotland) Order 1988, article 4(2)). That Order does not apply, however, in relation to an appeal to the Sheriff Principal (Sheriff Courts (Scotland) Act 1971, section 36B(3)). Thus the defenders are entitled to the expenses of the appeal. The amount will be fixed by the Sheriff Clerk in accordance with rule 21.6 of the Small Claim Rules 2002. There was no motion to certify the appeal as suitable for the employment of junior counsel. In terms of rule 21.6(11) I have authorised the Sheriff to pronounce decree on my behalf.